I have been somewhat busy in real life lately.
So, I have not been producing much content.
However, I did manage to make a few videos recently.
For those who do not follow me on YouTube, here they are:
Have a more secure financial future in an uncertain world by creating a stream of reliable passive income with high yields.
Ever since the CPFB introduced a colorful pie chart of our CPF savings a few years ago, I would look forward to mine every year like a teena...
I have been somewhat busy in real life lately.
So, I have not been producing much content.
However, I did manage to make a few videos recently.
For those who do not follow me on YouTube, here they are:
Posted by AK71 at 12:31 PM 2 comments
Stock prices of DBS, OCBC and UOB have been rocketing higher!
How do I feel?
I have mixed feelings, really.
I would like to add to my investments in all three banks but not as their stock prices make new highs.
What am I doing?
Just waiting.
I will simply do nothing and collect dividends.
Filling up my war chest and taking things easy.
Money in my war chest will go to buying more 6 months T-bills in the meantime.
I expect the T-bill cut-off yield tomorrow to be around 3.8% p.a.
This is a pretty decent return for something that is risk free and volatility free.
I don't see any need to take on price risk especially when stock prices are going higher.
Uncle Warren Buffett said before that we should avoid doing this:
"Buying a stock merely because you think it’s going to increase in price."
For my current investment in DBS, OCBC and UOB, my favorite holding period is forever.
Of course, if we are trading, then, we might sell some if we think prices are going back down.
More from dear Uncle Warren Buffett.
"Time is the friend of the wonderful company, the enemy of the mediocre."
"Only buy something you’d be perfectly happy to hold if the market shuts down for ten years."
This, perhaps, explains why I sold some of my investments in the past and increased my investment heavily in DBS, OCBC and UOB in recent years.
If AK can talk to himself, so can you!
Related post:
A simple strategy.
Posted by AK71 at 3:55 PM 18 comments
SRS was a topic I used to blog about pretty often.
I have not been blogging about it as much since I have not been making contributions in recent years.
Reason is because I no longer pay income tax.
If we are still paying income tax, contributing to our SRS account makes sense to enjoy some tax relief.
Of course, we want to put our SRS money to work or we would get a very miserable interest rate.
For many years, I used the SRS money to buy plain vanilla endowment policies.
They were savings plan with some insurance thrown in.
In fact, I still have one or two of those with NTUC Income using SRS money.
In recent months, I also used the money to buy T-bills with yields being so much higher than a couple of years ago.
Dividends paid by my investments in stocks using SRS money are used for this purpose.
Yes, I also use SRS money to buy stocks of businesses which I think make good investments for income.
I have blogged about this before and shared what kind of stocks I would buy with SRS money.
Basically, the businesses must be good income generators with strong balance sheets; nothing which is likely to do rights issues.
The very practical reason is because we must have the excess funds in our SRS account to take part in rights issues.
This can be difficult to ensure.
I shared my SRS portfolio of stocks before but that is outdated by now.
See:
Win and win again with SRS.
I had SATS in the portfolio.
Of course, regular readers would know that I sold it shortly after it announced the decision to buy WFS.
SATS just didn't have sufficient resources to do what they suggested.
They had to raise funds from shareholders.
It was something unexpected.
So, I took the opportunity to sell when there was a bounce in the stock price.
In place of SATS, there are ComfortDelgro and OCBC in my SRS investment portfolio now.
This is what the portfolio looks like now:
Based on the purchase prices, it is not difficult to guess that DBS and ST Engineering have been in the portfolio for some time now.
So, like what I did?
Paid less income tax and put the money to work to generate more tax free passive income?
We can certainly win and win again with SRS.
If AK can do it, so can you!
Reference:
How AK used his SRS money?
Posted by AK71 at 11:00 AM 13 comments
Labels:
ComfortDelgro,
DBS,
investment,
OCBC,
SRS,
STE
DBS reported stellar full year 2023 results.
Net profit rose 26% to S$10.3 billion.
Return on equity improved from 15% to 18%.
2023 saw a 22% increase in total income largely due to higher net interest margin, fee income and treasury customer sales.
A final dividend of 54c was proposed and this is 6c higher than before.
2023 full year dividend at $1.92.
DBS is also proposing a bonus share issue of 1 share for every 10 shares.
Bonus shares will qualify for dividends from 1Q 2024.
Assuming DPS stays the same, this will boost dividend received by 10% in 2024!
My decision to add to my investment in DBS in November last year was fortuitous.
This makes me happy.
Mr. Market seems to like the news as well as DBS share price has gone up by 2.6% so far today.
Gong Xi Fa Cai!
Wishing all readers a Happy Chinese New Year!
Reference:
Added to position in DBS.
Posted by AK71 at 11:12 AM 18 comments
Labels:
DBS
I don't usually blog at night but this is so exciting that I just have to talk to myself.
Yesterday, I talked about my 1 year T-bill which I purchased with CPF OA money maturing.
This was the available balance in my CPF IA then:
I also said that I transferred the funds from CPF IA back to CPF OA upon seeing the money credited at 5pm.
This was my CPF OA balance yesterday:
That would mean losing another month of CPF OA interest if the money went back to the CPF OA in February.
It is what it is, I guess.
However, I decided to check my CPF account just now just to see if a miracle took place.
Well, a miracle did happen!
The money is back in my CPF OA which means I would not lose another month of CPF OA interest!
My faith in DBS bank is restored!
Yes, I know.
AK is so shallow.
Bad AK! Bad AK!
I am so happy now.
Losing an extra month of CPF OA interest is a big deal in this instance because the sum is so big.
We are looking at about $1,400 of interest income.
Huat ah!
If AK can be shallow, so can you!
Reference:
CPF account recovery: Thoughts and plan!
Posted by AK71 at 9:13 PM 8 comments
This is probably going to my final blog post for 2023.
Planning on taking it easy for the rest of the month when it comes to social media.
Have been a little too active in the last few months on YouTube.
Now, going to spend more quality time with myself.
Being able to play three games everyday on my new gaming laptop makes me very happy.
That is what retirement is about.
It is about being happy.
A few things to talk about.
1. T-bills and SSB.
The Singapore Savings Bond being offered this month is offering a stunning 3.07% p.a. 10 year average yield.
Stunning for the wrong reason since last month's offer gave an attractive 3.4% p.a. 10 year average yield.
I think I will give this one a miss.
Am I veering away from my plan to keep buying Singapore Savings Bond as long as the yield is above 3% p.a. or not?
Well, the plan was to replace CPF Voluntary Contributions with Singapore Savings Bonds.
I have already done it with money meant for the CPF in 2023 and 2024.
2025 is work in progress and there is really no hurry.
In the meantime, I will continue to strengthen my T-bill ladder.
The last T-bill auction had a cut-off yield of 3.8% p.a.
Hopefully, it stays there for the auctions happening this month too.
2. DBS and UOB.
I still want to increase my investment in the local banks.
OCBC is already a very large position.
So, the idea now is to grow my positions in DBS and UOB.
For me, the stock prices to add would be between $30 to $30.50 for DBS and closer to $26 for UOB.
3. Taking it easy.
I have been thinking of taking it easy when it comes to investing for some time.
However, after a recent recording with The Fifth Person, I have been thinking about it even more.
The decision to retire early was a big step for me.
I was always a worrier and I still am a worrier.
Still, I convinced myself that I had sufficient financial resources to retire early.
Then, in retirement, I began to question if I really did have enough.
I continued to invest for income and increase my passive income in retirement.
In recent years, I have been telling myself to take it easy and that I have enough financial resources not to have to worry.
I have had some success but something Adam said during the recording hit home.
So, I could simply just buy more Singapore Savings Bonds and T-bills from now on and still be quite comfortable.
Risk free and volatility free.
Don't have to do anything else.
This would be another phase in my life, if I should do this.
To be honest, I rather like it.
Anyway, that's all the talking to myself for now.
If AK can talk to himself, so can you!
Merry Christmas and Happy New Year!
Just a quick update on what I have done in recent days to my investment portfolio.
For anyone who is following me on YouTube, it is no secret that I have been looking to add to my investment in DBS.
I identified the immediate support to be at $32.00, and if that should break, then, $31.80 would be next.
I added to my position at closer to $31.80 a share but it is just a nibble.
I see longer term support for DBS at between $30.00 to $30.50 a share.
So, that is where I would like to buy more.
DBS continues to impress me with its much higher ROE of 18% to 20% when compared to UOB and OCBC which have ROE of around 14%.
So, I feel that this justifies DBS trading at a higher price to book.
There is also the fact that DBS pays dividends quarterly and as a retiree who lives off his passive income, this is also attractive to me.
Next topic is T-bills.
The auction happened yesterday and the cut-off yield was 3.8% p.a.
I estimated it to be 3.88% p.a. but 3.8% p.a. is good enough to make me happy.
What also makes me happy is that non-competitive bids were fully allotted.
T-bill ladder is intact!
Next auction is happening on 7 December.
So, nothing earth shattering happened, really.
Just sticking to my plan.
Always have a plan, your own plan.
If AK can do it, so can you!
Posted by AK71 at 11:41 AM 12 comments
Labels:
bonds,
DBS,
investment
I received an SMS from CPF that went:
"You have a CPFIS investment deduction from your Ordinary Account."
I suppose this means that my competitive bid (using CPF-OA money) for the last 6 months T-bill auction that took place on 14 September was successful.
A quick check revealed that the cut-off yield was 3.73% p.a. and this is still relatively attractive.
This is relatively attractive when our local banks are offering much lower interest rates for 6 months fixed deposits.
Definitely, it is more attractive than the 2.5% p.a. offered by CPF-OA even when accounting for a loss of 7 months worth of interest income which would have been paid by CPF.
Why 7 months?
This is due to how CPF calculates and pays interest on our CPF savings, taking only the month-end balance into consideration.
So, all three of my applications using cash on hand, SRS and CPF-OA money were successful.
I find it strange that there seems to be less interest in 6 months T-bill now.
It seems to be weaker compared to a year ago, for example.
I remember non-competitive bids being so plentiful that my offer to buy was only partially filled at times.
Could it be that more people are buying the common stocks of DBS, OCBC and UOB instead, given the higher level of public awareness of how attractive their dividends are?
After all, a 6% dividend yield beats 3.73% p.a. return hands down.
Could AK be doing something wrong?
OMG!
I can feel an anxiety attack coming.
Time to go sink some enemy warships to calm myself down.
Related post:
Must buy T-bill?
(How to transfer from CPF-IA to CPF-OA?)
If we have been investing in Singapore equities long enough, we would be familiar with the talk that August is a seasonally weak month.
Of course, there is always some hope for a National Day Rally.
What about AK?
If there is a correction, and if prices hit my target buy prices, I might buy some.
Usually, Q3 is pretty good in terms of passive income received from my investment portfolio.
So, I should be able to take advantage of any market weakness in August.
My plan is still to add to my investments in DBS, OCBC and UOB so that, together, they form 40% of my portfolio.
Looking at the charts, I see the following supports which could be tested in case of a correction.
DBS.
At what seems to be a neckline at $31.87 per share and if that were to break, we could see $30.00 per share again.
With DBS common stock's rich premium to valuation, I am not in a hurry to increase my investment in DBS.
OCBC.
We could see a gap covering at $12.45 a share and this is also where many moving averages are bunching up which should provide a strong support.
If this were to break, we could see a pessimistic Mr. Market selling down to the next gap at $12.20 per share.
I would probably buy some if that should happen.
UOB.
We could see $28.00 per share again, give or take few cents.
If that were to break, we could see the share price going a lot closer to $27.00 a share.
That is where I might buy some if it should happen.
I would not go in with all guns blazing in case there should be extreme pessimism in the market for some reason.
With limited resources and with Q4 being usually a weak month for me in terms of dividends, it is better for me to err on the side of caution.
Before I sign off, if you do not follow my YouTube channel, I produced a new video today and you might be interested in watching or listening to it.
If AK can do it, so can you!Posted by AK71 at 8:26 PM 20 comments
Was feeling a little tired after a morning of activities.
Medical appointment followed by grocery shopping.
Lost some blood and still had to carry heavy bags.
After settling down at home, I read the news and I suddenly felt energized!
DBS increased their dividends to 48 cents a share per quarter!
Huat ah!
The decision to invest in DBS back in 2016 at $13 to $14 a share and continuing to accumulate over the years whenever Mr. Market felt depressed is paying off handsomely.
Annualizing 48 cents a share, annual dividend per share is $1.92 which means the dividend yield on my initial investment is in excess of 14% per annum!
Of course, with DBS being one of my largest investments, this is probably going to have an outsized impact on my passive income for the year.
I so stunned like vegetable!
What is even more impressive is that the higher dividend is probably sustainable.
DBS revealed that the expected catch up in funding cost has not been as bad as feared.
In fact, net interest margin saw a further increase of 12 basis points, quarter on quarter.
Net profit grew 48% year on year and 5% quarter on quarter!
I have said before that DBS is able to trade at a juicy premium to book value because of its very impressive return on equity or ROE when compared to UOB and OCBC.
DBS saw its ROE hit a new quarterly high of 19.2%, up from 13.4% in the same quarter last year!
DBS has a CET1 ratio of 14.1% which is in excess of what it feels is optimum.
So, we could possibly see higher dividends to come if DBS has no better use for the money.
DBS could, of course, simply hold on to the money for a rainy day.
Whatever the case might be, DBS is a rock solid investment for both income and growth.
Yes, just like what I said about investing in UOB, we can have our cake and eat it too.
OCBC should deliver good results tomorrow too.
I am feeling so giddy now, I need to go lie down for a bit.
If AK can do it, so can you!
Reference:
DBS fair value per share?
Transcript of my YouTube video @AK71SG.
Posted by AK71 at 12:08 PM 4 comments
Whenever I could find some free time, I would go out to sea in the last few days.
It is my latest hobby!
Well, in a sense, anyway.
Look at my latest ship!
Look at those cannons!
If you are interested in some naval warfare too, this is my latest free to play find.
Absolutely free to play and perfect if you feel like destroying stuff to feel better after a rough day.
Use my referral link for the Asian server and both of us will get some freebies in the game:
World of Warships. (AK's referral link.)
Anyway, now that the serious stuff is out of the way, let's look at other stuff.
In my last blog, I talked to myself about the bumper interim dividend from UOB.
Up by 40%, it made me giddy with joy!
I expect OCBC and DBS to pay higher dividends too.
This means they should at least match their dividends in the last quarter.
If nothing goes wrong, my passive income for Q3 2023 should be somewhat higher than for Q3 2022.
If this pans out, it would be quite a feat since 2Q 2022 passive income generated by my investment portfolio increased by an impressive 42% compared to 2Q 2021 (mostly because the banks were still paying lower dividends in 2Q 2021.)Whether passive income in Q3 2023 would be higher than Q2 2023 is less certain and, for that, I would wait and see.
On to another happy discovery.
When I checked my bank account, I found a few thousand dollars deposited by my old friend, AIMS APAC REIT (AA REIT.)
With my war chest largely depleted by IREIT Global's rights issue, getting some free money from AA REIT makes me love the REIT more.
As there will be quite a bit more dividend to be received from UOB and probably OCBC and DBS too next month, I decided to increase the quantum in my application for the upcoming 6 months T-bill with some of the money.
It is now open for application and the auction is happening on 3 August.
I will be going for non-competitive bid, as usual.
There is no need to agonize over a competitive bid since whatever the cut-off yield might be, it would most likely be higher than whatever interest rate the banks are offering for a 6 months fixed deposit.
So, the exercise to strengthen the fixed income component of my investment portfolio continues.
It gives my portfolio greater stability.
It gives me greater peace of mind to know that if I need more money, I have a T-bill ladder I can rely on.
This means I would not have to sell my stocks at prices not of my own choosing if some things should go terribly wrong in life.
Being forced to do something, not having control over our lives is not a good feeling.
With the yield curve still inverted, 6 months T-bills are going to remain rewarding.
So, they help to keep me sane and happy at the same time.
If AK can do it, so can you!
Related posts:
1. 2Q 2023 passive income.
2. 2Q 2022 passive income.
3. T-bill ladder is attractive.
Posted by AK71 at 6:11 PM 12 comments
Labels:
AIMS-AMP Capital Industrial REIT,
bonds,
DBS,
IREIT,
OCBC,
passive income,
UOB
I have been busy gaming in the last few days as Neverwinter celebrates its 10th birthday.
Posted by AK71 at 10:18 AM 32 comments
Labels:
AIMS-AMP Capital Industrial REIT,
bonds,
DBS,
IREIT,
OCBC,
UOB
This is the transcript of a YouTube video I produced recently.
-----------------------
Posted by AK71 at 3:13 PM 4 comments
Posted by AK71 at 9:48 AM 8 comments
Labels:
DBS,
investment,
OCBC,
passive income,
UOB
For readers who who are not subscribed to my YouTube channel or who simply prefer reading blogs to watching videos, this is the transcript of another recent video I produced.
Posted by AK71 at 9:25 AM 23 comments
Posted by AK71 at 9:48 AM 14 comments
Labels:
DBS,
investment,
OCBC,
UOB